The growth of young firms plays a pivotal role in the contemporary economy, fostering innovation, job creation and economic vitality. As a result, this topic has increasingly captured the attention of researchers, policy makers and practitioners alike. The present doctoral thesis employs a multi-lens theoretical approach, including the resource-based view, the performance feedback theory and the contingency approach, to examine the determinants, persistence and consequences of the growth of young firms within the context of innovation and considering environmental changes.
The dissertation includes three main chapters, each examining a specific aspect of young firm growth and its link with innovation: (I) the antecedents of growth, (II) the persistence of growth, and (III) the growth-profitability relationship. A quantitative approach is employed, drawing upon a representative panel of data encompassing Spanish manufacturing firms less than ten years over a period of 26 years.
The first paper challenges the conventional wisdom that innovation is a guaranteed catalyst for the growth of young firms, demonstrating that such firms may experience negative sales growth after implementing process innovation. However, the results show that in competitive or dynamic environments, young firms focusing on process innovation might achieve positive growth. The second paper addresses the persistence of growth in young firms. The findings demonstrate that these firms tend to reverse negative growth results and sustain positive ones, thereby illustrating the growth-seeking dynamic of young firms. The analysis expands on the role of product innovation on growth persistence, highlighting differences when innovation is implemented persistently on a continuous basis as opposed versus sporadically. The third paper examines the relationship between growth and profitability, demonstrating that internal factors, such as R&D investment, and external circumstances, such as economic crises, enhance the profitability of young growing firms.
These findings have both theoretical and practical implications, providing further insights into the role of innovation in young firm growth, growth persistence, and profitable growth. Furthermore, the thesis underscores the importance of challenging environments in shaping the growth of young firms.
Determinants and Consequences of Growth in Young Firms: An Analysis of Innovation and Environmental Factors
Masó Llorente, A. (Author). 21 Nov 2024
Student thesis: Doctoral thesis
Student thesis: Doctoral thesis